Category

Revenue forecast

COGS

Research and development expenses

Sales, General and administrative

Depreciation & Amortization

t, tax rate

Capex

Net Working Capital

Assumptions
revenue streams are forecasted on the basis of future sales of the drugs. Please see the "Revenue

COGS is taken as a fixed % of sales/revenue based on historical values

This expense is fixed for each year (JPY 345 Bln)

SGA is taken as a fixed % of sales/revenue based on historical values

This value is fixed based on historical value. See "Depreciation estimate" tab

t = 30.7%

Capex is taken proportionate to Sales/Revenue. See "Capex estimate" tab

NWC is taken proportional to Sales. See "WC" tab

JPY Bln FY 2015
(1 April 2015- 31 March 2016)
Revenue 1807.4
% growth

COGS 535.405
% of revenue 29.6%

Gross profit 1271.995

% of revenue 70.4%

Operating expenses
Research and development 345.927

Sales, General and administrative 650.773

% of revenue 36.0%

Other operating expenses 19.305

Total operating expense 1016.005

EBITDA 255.99

Depreciation & Amortization Expense 181.2

EBIT 74.79
EBIT*(1-t) 51.82947

Capex 136.8

NWC 516.574

Change in NWC 13.326

FCFF 82.90347
0.00
PV of FCFF 82.90347
FCFF 4830.3287163259

Equity value at 2015-16 4100.9487163259

Equity value at 2017-18 4497.9164477988

 FY 2016E FY 2017E
(1 April 2016- 31 March 2017) (1 April 2017- 31 March 2018)
1902.7908604962 1995.1015037176
5.3% 4.9%

563.6625764435 591.0077020017
29.6% 29.6%

1339.1282840527 1404.0938017159
70.4% 70.4%

345.927 345.927

685.1194625748 718.3568611701
36.0% 36.0%

19.305 19.305

1050.3514625748 1083.5888611701

288.7768214779 320.5049405458

159.9 159.9

128.8768214779 160.6049405458
89.3116372842 111.2992237982

121.5221082915 127.41754547

656.9021086624 688.7705906081

140.3281086624 31.8684819457

-12.6385796696 111.9131963825
1.00 2.00
-12.067984611 102.0361948407
 FY 2018E FY 2019E
(1 April 2018- 31 March 2019) (1 April 2019- 31 March 2020)
2091.3867369849 2124.8489247766
4.8% 1.6%

619.5302179459 629.442701433
29.6% 29.6%

1471.856519039 1495.4062233436
70.4% 70.4%

345.927 345.927

753.02535188 765.0737575101
36.0% 36.0%

19.305 19.305

1118.25735188 1130.3057575101

353.599167159 365.1004658336

159.9 159.9

193.699167159 205.2004658336
134.2335228412 142.2039228227

133.5668206147 135.7038897445

722.0112236589 733.5634032375

33.2406330509 11.5521795785

127.3260691756 154.8478534996
3.00 4.00
110.8477196963 128.7215019479
 FY 2020E
Terminal
(1 April 2020- 31 March 2021)
2158.8465075731 2193.388052
1.6% 1.6%

639.5137846559 649.7460052
29.6% 29.6%

1519.3327229171 1543.642046
70.4% 70.4%

345.927 345.927

777.3149376302 789.7519766
36.0% 36.0%

19.305 19.305

1142.5469376302 1154.983977

376.7857852869 388.6580699

159.9 159.9

216.8857852869 228.7580699
150.3018492038 158.5293424

137.8751519805 140.0811544

745.3004176893 757.2252244

11.7370144518 11.92480668

160.5896827716 166.4233813
5.00 5.00
127.4676638688 4290.420151
USD Mln FY 2015
(1 April 2015- 31 March 2016)
Revenue 16137.5
% growth

COGS 4780.4
% of revenue 29.6%

Gross profit 11357.1

% of revenue 70.4%

Operating expenses
Research and development 3088.6

Sales, General and administrative 5810.5

% of revenue 36.0%

Other operating expenses 172.4

Total operating expense 9071.5

EBITDA 2285.6

Depreciation & Amortization Expense 1617.9

EBIT 667.8
EBIT*(1-t) 462.8

Capex 1221.4
0.0

NWC 4612.3

Change in NWC 119.0

FCFF 740.2
0.00
PV of FCFF 740.2

FCFF 43127.9

Equity value at 2015-16 36615.6

Equity value at 2017-18 40160.0
 FY 2016E FY 2017E
(1 April 2016- 31 March 2017) (1 April 2017- 31 March 2018)
16989.2 17813.4
5.3% 4.9%

5032.7 5276.9
29.6% 29.6%

11956.5 12536.6
70.4% 70.4%

3088.6 3088.6

6117.1 6413.9
36.0% 36.0%

172.4 172.4

9378.1 9674.9

2578.4 2861.7

1427.7 1427.7

1150.7 1434.0
797.4 993.7

1085.0 1137.7
0.0 0.0

5865.2 6149.7

1252.9 284.5

-112.8 999.2
1.00 2.00
-107.7 911.0
 FY 2018E FY 2019E
(1 April 2018- 31 March 2019) (1 April 2019- 31 March 2020)
18673.1 18971.9
4.8% 1.6%

5531.5 5620.0
29.6% 29.6%

13141.6 13351.8
70.4% 70.4%

3088.6 3088.6

6723.4 6831.0
36.0% 36.0%

172.4 172.4

9984.4 10092.0

3157.1 3259.8

1427.7 1427.7

1729.5 1832.1
1198.5 1269.7

1192.6 1211.6
0.0 0.0

6446.5 6549.7

296.8 103.1

1136.8 1382.6
3.00 4.00
989.7 1149.3
 FY 2020E
Terminal
(1 April 2020- 31 March 2021)
19275.4 19583.8
1.6% 1.6%

5709.9 5801.3
29.6% 29.6%

13565.5 13782.5
70.4% 70.4%

3088.6 3088.6

6940.3 7051.4
36.0% 36.0%

172.4 172.4

10201.3 10312.4

3364.2 3470.2

1427.7 1427.7

1936.5 2042.5
1342.0 1415.4

1231.0 1250.7
0.0 0.0

6654.5 6760.9

104.8 106.5

1433.8 1485.9
5.00 5.00
1138.1 38307.3
1000.0
 Historical Capex & Depreciation
Year Sales Capex Capex (% of Sales)
FY2010 1419.4 148.9 10.5%
FY2011 1508.9 1255.2 83.2%
FY2012 1557.3 266.7 17.1%
FY2013 1691.7 99.4 5.9%
FY2014 1777.8 101.6 5.7%
FY2015 1807.4 136.8 7.6%

Historical Capex (% of sales) 6.4%

Capex forecast

Year Sales Capex

FY2015 1807.4
FY2016E 1902.791 121.5221082915
FY2017E 1995.102 127.41754547
FY2018E 2091.387 133.5668206147
FY2019E 2124.849 135.7038897445
FY2020E 2158.847 137.8751519805
Terminal 2193.388 140.0811544121
on
D&A
91.5
126.9
165.5
187.3
191.6
181.2

159.9
Year CA CL WC Change in WC Sales
2012 1231.4 633.8 597.6
2013 1592.5 802.8 789.7 192.1 1691.7
2014 1520.072 1016.824 503.248 -286.452 1777.8
2015 1373.787 857.213 516.574 13.326 1807.4

Forecast

Year Sales WC Change in WC

FY2015 1807.4 516.574 13.326
FY2016E 1902.7908604962 656.9021 140.328108662
FY2017E 1995.1015037176 688.7706 31.8684819457
FY2018E 2091.3867369849 722.0112 33.2406330509
FY2019E 2124.8489247766 733.5634 11.5521795785
FY2020E 2158.8465075731 745.3004 11.7370144518
Terminal 2193.3880516942 757.2252 11.924806683
WC as % of Sales

47%
28%
29%
35%
Type Oncology GI Cardiovascu
CNS Others
2016 5.00% 5.00% 5% 10.40% 4.40%
2017 4.00% 4.45% 5% 9.90% 4.40%
2018 4% 4.45% 5% 9.40% 4.40%
2019 2% 2% 2% 2% 2%
2020 2% 2% 2% 2% 2%
terminal 2% 2% 2% 2% 2%
Healthcare
9.26%
8.76%
8.2600%
2%
2%
2%
 Revenue streams
Ethical drugs
Year CNS GI Oncology Cardiovascu
Others Healthcare Others
FY2015 65.3045 490.8063 458.6312 392.9177 241.0404 80.1 78.6
FY2016 72.09617 515.3466 481.5627 412.5636 251.6462 87.51726 82.0584
FY2017 79.23369 538.2795 500.8252 433.1917 262.7186 95.183772 85.669
FY2018 86.68165 562.2329 520.8583 454.8513 274.2782 103.045952 89.4384
FY2019 88.06856 571.2287 529.192 462.1289 278.6667 104.694687 90.8694
FY2020 89.47766 580.3683 537.6591 469.523 283.1254 106.369802 92.3233
Terminal 90.9093 589.6542 546.2616 477.0354 287.6554 108.071719 93.8005
 Total
1807.4
1902.791
1995.102
2091.387
2124.849
2158.847
2193.388
 Equity Market value Debt 1 Debt 2
FY12 834.4 1080.4
FY13 3863.1 970.1 25% 1225.8 32%
FY14 4738.8 799.5 17% 1073.2 23%
FY15 4058.9 870.4 21% 955.7 24%

D/E 18%

cost of debt 0.60%

risk free rate 0.50% WACC
risk premium 7%
beta 0.71 5.47%

tax rate 30.70%

Debt from FT
584.57 13% 15% FY12 1.3 154.1
859.99 15% 18% FY13 1.3 154.1
729.38 15% 18% FY14 30 70
FY15 228.5

4.73%
471.3 111.3 96.4 834.4
463.3 241.3 110.1 970.1
419.4 210 70.1 799.5
179.8 360 102.1 870.4
Oncology
Drug Sales
Velcade 162
Leuprorelin 124.4
Adcetris 27.6
Ninlaro 4
Vectibix 18.4
Total (from major drugs) 336.4
Remainder proportion 0.278177
Total contribution 458.6312

Total (from above) 1209.3

Total Ethical (from financials) 1648.7
Remaining 439.4
CNS
Drug Sales
Brintellix 24.5
Reminyl 16
Rozerem 7.4
Total (from major drugs) 47.9
Remainder proportion 0.03961
Total contribution 65.3045
GI
Drug Sales
pantoprazole 100.8
Lansoprazole 89.5
Entyvio 86.2
Dexilant 75.1
Takecab 8.4
Total (from major drugs) 360
Remainder proportion 0.297693
Total contribution 490.8063
Cardiovascular & Metabolic Others
Drug Sales Drug Sales
Candesartan 84.8 Colcrys 46.5
Azilva 59 Uloric 42.5
Nesina 48.9 Amitiza 37.3
Contrave 56 Enbrel 40.8
Lotriga 22.3 Benet 9.7
Basen 8.7 Total (from 176.8
Actos 8.5 Remainder p0.1462003
Total (from major drugs) 288.2 Total contri 241.0404
Remainder proportion 0.23832
Total contribution 392.9177
Bn JPY
 Bn JPY
Drug Sales
Akinamin tablet 25.2
Akinamin drink 14.9
Benza 9.8
Biofermin 8.6
Borraginol 4.5
63